A new financial year often ushers in new contribution limits, but this year is slightly quirky.
The most common contributions that virtually all of us have received at some point are concessional contributions, that is, those made by an employer or made personally and claimed as a tax deduction. The limit on these contributions during 2024/25 was $30,000 and it hasn’t changed this year. This threshold gets increased in line with average weekly ordinary time earnings, but only in $5000 increments, so sometimes we have a year or two where it doesn’t change.
The standard annual limit on the next most common type of contribution, non-concessional contributions, is also staying the same at $120,000, defined as four times the concessional contributions cap, so they both change at the same time.
But there is one peculiar thing that changed for non-concessional contributions from 1 July 2025.
An individual’s cap on these contributions actually depends on how much they have in super at the previous 30 June, so for the contributions in 2025/26 the date we care about will be 30 June 2025. Anyone who has more than a particular amount in super at that time actually has a cap of $nil rather than $120,000. The idea is that if you already have a lot in super, the government doesn’t want to you to be allowed to keep putting more in.
The particular threshold for this purpose is the general transfer balance cap. If you’ve never started a pension, you may not even know what a transfer balance cap is because it’s got nothing to do with contributions and everything to do with starting income streams. The general transfer balance cap is the limit on how much anyone can put into a pension after they retire or turn 65 over their lifetime. What does it have to do with the non-concessional contributions cap? Nothing really, except that it’s a convenient number and so it’s used for this threshold.
What has changed from 1 July 2025 is that the general transfer balance cap has increased from $1.9 million to $2 million.
That means even though the standard cap on non-concessional contributions hasn’t changed, as previously noted it is still $120,000, there will be some people who can make these contributions in 2025/26 that couldn’t do so in 2024/25. This is because they would have had too much money in super at 30 June 2024 (over $1.9 million), but now the threshold has gone up to $2 million, their balance at 30 June 2025 might sneak in underneath it.
And if you’ve ever been told you’ve already used up your transfer balance cap, that is, you started a pension with the maximum possible at the time, ignore that message when it comes to contributions. The transfer balance cap is just a threshold and your non-concessional contributions limit gets worked out exactly the same way as everyone else’s. Your super is checked against the brand new general transfer balance cap of $2 million and not the cap you might have had years ago when you started your pension.
Another quirk when it comes to non-concessional contributions is that some people can contribute up to two or three years’ worth at once using the current-year cap and the next year’s cap, potentially even the year after as well. This is known as using the bring-forward rules.
Again, this depends on having a super balance that is below a particular threshold at the previous 30 June. The thresholds depend on a combination of the general transfer balance cap and the non-concessional contributions cap. So they’ve also changed for 2025/26. In short, they’re now as follows for people who meet the other criteria (see below):
- someone with less than $1.76 million in super at 30 June 2025 can contribute up to three years’ worth of non-concessional contributions in 2025/26, or $360,000, and
- someone with between $1.76 million and $1.88 million can contribute up to two years’ worth of non-concessional contributions, or $240,000.
There are other rules whereby only people who aren’t still in an early bring-forward period (for example, they contributed three years’ worth last year and so they’ve already used this year’s cap) and meet the age requirements of being under age 75 at 30 June 2025 can do this. But it’s worth noting those thresholds have changed since 2024/25. Last year, they were $1.66 million and $1.78 million respectively.
The curious result here? Sometimes contribution opportunities change even when the caps don’t.
This article was first published on heffron.com.au.
Meg Heffron is managing director of Heffron.
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